Vedanta Resources PLC (LON:VED) shares soared after saying chairman Anil Agarwal’s family trust has agreed to buy the rest of the company in a deal that values the mining group at £2.325mln.
Volcan Investments has proposed an all cash offer of 825p per share for the rest of the shares it does not already own in Vedanta Resources. Volcan currently holds a 66.53% stake in Vedanta.
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An independent committee of Vedanta’s board, formed to review and evaluate that proposal, has indicated to Volcan that it supports the proposal and intends to recommend a firm offer to shareholders.
FTSE 250-listed Vedanta said the offer price of 825p represents a premium of 27.6% to the closing share price of 647p on June 29.
Vedanta shareholders will also be entitled to receive the fiscal year 2018 dividend of US$0.41 per share.
Vedanta to drop dual stock exchange listing
Volcan plans to delist Vedanta from the London Stock Exchange following the acquisition. The company will retain its listing on India’s National Stock Exchange.
"The London listing has served us extremely well since that time," said Agarwal, who is also the biggest shareholder of Anglo American PLC (LON:AAL) with a 20% stake.
"However, given the subsequent growth of our underlying businesses and the maturity of the Indian capital markets, together with related feedback from our shareholders and other stakeholders, we have concluded that a separate London listing is no longer necessary to achieve the Vedanta Group's strategic objectives.
"In taking this important step towards greater group simplification, we wanted to ensure that the independent shareholders of Vedanta Resources Plc were provided with the opportunity to exit on attractive terms, and I believe this possible offer will deliver on that objective."
'Curious action' by chairman, says Liberum
Liberum analyst Ben Davis said: "It's curious action given that Agarwal's plans have always been widely ambitious, including is borrowing of Anglo American stock for three at a high price, and this will limit his access to London's capital markets. Minority shareholders may hold out for more, but given the wild ride of the Vedanta share price, they may be keen on an easy exit."
Shares in Vedanta rocketed up 26% to 819p in morning trading.